In brief
- The Upper Tribunal reduced the FCA’s fines against pension transfer specialist Heather Dunne and firm principal Richard Fenech from £399,817 and £270,646 to £41,230 and £16,046 respectively, but upheld both prohibition orders.
- The reductions reflected a narrower approach to disgorgement, tied to the finding that 18% of Dunne’s advice was unsuitable, and to Fenech’s relevant income. The Tribunal also refused to award interest given unexplained regulatory delays.
- The case highlights the scope to challenge FCA penalty calculations without overturning liability findings. It also underlines the significance of dishonesty towards the regulator: Fenech’s prohibition stood despite his dishonesty being an isolated, out-of-character act.
Overview
On 27 July 2026, the Upper Tribunal handed down its second decision in Fenech and Dunne v Financial Conduct Authority [2026] UKUT 00281 (TCC), addressing the penalties and prohibition orders left outstanding after its earlier liability findings in [2026] UKUT 00162 (TCC) (the First Decision).
The Authority had originally fined pension transfer specialist Ms Heather Dunne £399,817 and Mr Richard Fenech, principal of her firm, £270,646, and imposed prohibition orders on both. By the hearing, the Authority had already reduced its own figures to £277,087 and £106,724 respectively - but the Tribunal cut them further still, to £41,230 and £16,046. Both prohibition orders, however, were upheld.
Background
Ms Dunne was the appointed representative of Financial Solutions Midhurst Ltd, owned by Mr Fenech. The Authority found Ms Dunne breached Statement of Principle 2 (unsuitable pension transfer advice) and Statement of Principle 1 (dishonesty, over a backdated appointed representative agreement provided to the Authority). Mr Fenech was found to have breached Statement of Principle 7 (inadequate oversight of Ms Dunne) and Statement of Principle 1 (dishonesty over the same backdated agreement), though the Tribunal's First Decision found his dishonesty was "a one-off action… out of character" and that he had not been reckless. It also found that at least 18% of Ms Dunne's clients received unsuitable advice.
Prohibition orders upheld
Prohibition references are "non-disciplinary", giving the Tribunal only a supervisory jurisdiction: it can dismiss the reference or remit it to the Authority, but cannot substitute its own view on fitness and propriety. Ms Dunne asked the Tribunal to remit her order with a direction that the Authority consider a "minded to revoke" indication under ENFG 5.2.5G; the Tribunal held this fell outside its remittal powers under section 133(6)–(6A) FSMA, and in any event her order was plainly within the range of reasonable decisions given her dishonesty and the unsuitable advice findings.
Mr Fenech argued the First Decision's findings (no recklessness, more suitable advice than assumed, dishonesty as an out-of-character one-off) were "clearly at variance" with the Authority's original basis, engaging Carrimjee v FCA [2015] UKUT 0079 (TCC). The Tribunal agreed – but applying the "inevitability" test, held the Authority would inevitably still prohibit him given his dishonesty toward the regulator, which ENFG 5.3.2G treats as central to fitness and propriety. Both references were dismissed so far as they concerned prohibition; both individuals may still apply under section 56(7) FSMA to vary or revoke their orders.
Penalties recalculated down
Penalty references, unlike prohibition references, give the Tribunal a full merits jurisdiction. The Tribunal rejected Ms Dunne's case for a public censure with no fine, agreeing her conduct sat "at the more serious end of the spectrum" and that the passage of time and prior publicity were not relevant deterrence factors.
On disgorgement, the Authority sought to strip Ms Dunne of all benefits from her pension transfer business, citing systemic issues such as templated Suitability Reports. The Tribunal rejected this as disproportionate, holding it was "neither appropriate or proportionate… on the basis that the Suitability Reports contained templated passages", and instead tied disgorgement to its actual finding that 18% of advice was unsuitable, producing a figure of £41,230 – which, since public censure was rejected, effectively became Ms Dunne's whole penalty. The Tribunal distinguished full-disgorgement cases such as Fox-Bryant v FCA [2024] UKUT 00357 (TCC) and Arian Financial LLP v FCA [2024] UKUT 00352 (TCC), where the wrongdoing was far more pervasive. The same 18% approach reduced Mr Fenech's disgorgement figure to £5,165.
Despite DEPP's default position that interest is "ordinarily" charged on disgorgement, the Tribunal declined to add any – the Authority had sought around £48,032 from Ms Dunne alone. It found roughly three years of unexplained delay across the nine-year investigation, with "no evidence or explanation for those delays", and concluded it was not in the interests of justice to charge interest on the facts.
For Mr Fenech's Step 2 figure, the Authority had used his full £240,033 income from his firm; the Tribunal agreed instead to confine "relevant income" to the 15.11% (£36,269) attributable specifically to the appointed representative arrangement with Ms Dunne, drawing an analogy with the firm-level DEPP 6.5A approach of using relevant business-line revenue. Applying the Authority's own revised Level 4 seriousness assessment (30%, following the finding of no recklessness) produced a Step 2 figure of £10,881. No further reduction was allowed for his previously unblemished career, since he had in fact denied wrongdoing during his regulatory interviews. Combined with disgorgement, his total penalty came to £16,046 – which the Tribunal found sufficient to deter, despite his "financially perilous position".
Comment
This is yet another case where the Tribunal has found in favour of the FCA but reduced penalty. The reductions here are striking – an 85% cut from the Authority's own fallback figures for both individuals – yet none of it reflects any softening of the liability findings; both prohibition orders stand. The driver was methodological discipline: disgorgement pegged strictly to the Tribunal's proven 18% finding rather than a broader systemic case, and a "relevant income" figure for Mr Fenech confined to the specific business stream connected to his breach. Firms and individuals facing extrapolated or systemic disgorgement claims should test closely whether the Authority's case in fact matches its proven findings.
The refusal to award interest, despite DEPP's default position, is also notable: unexplained regulatory delay defeated the claim even without evidence of specific prejudice, a useful point for anyone facing a long-running investigation to keep in mind when it comes to eventual penalty calculations.
Most strikingly, a "clearly at variance" finding under Carrimjee made almost no practical difference to Mr Fenech's prohibition outcome: a single finding of dishonesty toward the regulator was enough for the Tribunal to find the result would "inevitably" be the same. Candour with the FCA continues to operate as an almost standalone determinative factor in fitness and propriety cases, however isolated or out of character the lapse.